This document provides an overview of operations management. It discusses key topics such as the three basic functions of organizations, the definition of operations management, types of transformations involved in operations, ways to add value through operations, systems concepts, types of production systems, objectives and decisions in operations management, and the history and scope of the field.

1. UNIT 1 OPERATIONS MANAGEMENT – AN OVERVIEW Roshan K Gnyawali MANAGEMENT OF MACHINES AND MATERIALS (MS-5)

6. VALUE ADDITION… Stage of Production Value Added Value of Product Farmer produces and harvests $0.15 $0.15 Wheat transported to mill $0.08 $0.23 Mill produces flour $0.15 $0.38 Flour transported to baker $0.08 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $0.08 $1.08 Grocery store sells bread $0.21 $1.29 Total Value-Added $1.29

7. SYSTEMS CONCEPT Inputs Land Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback Feedback Feedback Value added System : A purposeful collection of people, objects and procedures for operating within an environment.

9. SYSTEMS CONCEPT… Inputs Conversion Outputs XYZ Juice Company Fruits Cleaning Bottle of Juice Metal Sheets Making bottle Water Cutting Energy Mixing Labor Packing Building Labeling Equipment

10. SYSTEMS CONCEPT… XYZ Hospital Inputs Conversion Outputs Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy

11. GOODS vs SERVICE Automobile assembly, steel making Home remodeling, retail sales Automobile Repair, fast food Computer repair, restaurant meal Song writing, software development Goods Service Surgery, teaching Automobile assembly, steel making Home remodeling, retail sales Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Surgery, teaching Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Automobile assembly, steel making Home remodeling, retail sales Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales Surgery, teaching Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food Automobile assembly, steel making Home remodeling, retail sales

12. GOODS vs SERVICE… Tangible Act

13. GOODS vs SERVICE… Characteristic Goods Service Customer contact Low High Uniformity of input High Low Labor content Low High Uniformity of output High Low Output Tangible Intangible Measurement of productivity Easy Difficult Opportunity to correct problems High Low Inventory Much Little Evaluation Easier Difficult Patentable Usually Not usual Demand Can be Forecasted Variable Location Any Near to User

14. PRODUCTIVITY Productivity = Output/ Input Labor Productivity = Output/ Labor Input Efficiency with which we are converting the inputs into outputs

18. OM DECISIONS… Operational (Short-term) Decision Strategic (Long-term) Decisions OM Decisions Periodic Decisions Continual Decisions Selection Design Updating Operating - Controlling

30. End of Unit 1 UNIT 2: Product Selection